Yen strengthens after China acts to cool growth

AGENCIESApr 30, 2007, 05.00pm IST

TOKYO: The yen rebounded from a record low against the euro after China curbed lending to cool its economy, prompting traders to reduce higher-yielding investments funded by borrowing the Japanese currency.Losses in the euro accelerated as the threat of military involvement in Turkey's election caused investors to pare holdings and pay back yen loans. The New Zealand and Australian dollars, favourites for so-called carry trades, posted the biggest declines against Japan's currency.The yen rose to 162.63 per euro in London, after reaching an all-time low of 163.32, from 163.27 in New York on April 27. It climbed to 119.54 per dollar from 119.63 and may advance to 118.50 and 162.00 per euro this week, traders said.Trading will be subdued this week because of public holidays in Japan today, May 3 and May 4, Germany, France and Italy tomorrow and in China from tomorrow until May 4, said Ashley Davies, currency strategist at UBS in Singapore. Volume is easily less than half the usual in Asia, he said.